This paper presents a scalable distributed algorithm for computing and maintaining multi-target identity information. The algorithm builds on a novel representational framework, Identity-Mass Flow, to overcome the problem of exponential computational complexity in managing multi-target identity explicitly. The algorithm uses local information to efficiently update the global multi-target identity information represented as a doubly stochastic matrix, and can be efficiently mapped to nodes in a wireless ad hoc sensor network. The paper describes a distributed implementation of the algorithm in sensor networks. Simulation results have validated the Identity-Mass Flow framework and demonstrated the feasibility of the algorithm.